Southern Alliance Company needs to raise $22 million to start a new project. The company has a target capital structure of 65 percent common stock, 11 percent preferred stock, and 24 percent debt. Flotation costs for issuing new common stock are 14 percent, for new preferred stock, 8 percent, and for new debt, 3 percent. What is the true initial cost figure Southern should use when evaluating its project? (Do not round your intermediate calculations. Note: calculate the weighted average flotation costs (f) first.)

Multiple Choice

• $20,166,667

• $24,354,000

• $25,621,500

• $23,650,616

• $24,636,058